Congress Must Act in Wake of Court Ruling on Campaign Finance

The more we learn about the Supreme Court's Citizens United decision, the more ominous it becomes. Of course, the reality of justices reaching out and plucking a broad case from nowhere to overturn decades of practice, law and precedent is itself chilling, setting itself a new precedent for activism. But Justice Anthony Kennedy's reasoning in Citizens United creates even more potential for chaos and disaster. The idea that corporations are the equivalent of people leads directly to the next step: direct contributions to candidates from corporate coffers, not just unlimited independent expenditures to influence campaigns.

Less noticed was Kennedy's dismissal of the backbone of the corruption rationale that was a core of the 1976 Buckley v. Valeo Supreme Court decision and that has been at the heart of campaign finance regulation from the beginning. As Eliza Newlin Carney points out in the National Journal, Kennedy took a dramatically narrower view of corruption, so that now basically only the direct quid pro quo is relevant. She writes, "One phrase, in particular, from the high court's ruling, has jolted campaign finance scholars. 'The fact that speakers may have influence over or access to elected officials does not mean that these officials are corrupt.' If the only constitutional rules are those that block blatant corruption in the form of a quid pro quo, say election lawyers, there may be few election rules the court is prepared to defend." The jungle is coming.

Carney's piece was about another, little-noticed case that may soon make its way to the Supreme Court, v. Federal Election Commission, that may well result in unlimited corporate and other political action committee funds, with little or no disclosure, allowed to be used as independent expenditures to influence campaigns.

Congress needs to create a whole new regime of campaign finance, one focused more on incentives for small donors and less on regulatory regimes limiting behavior.

That case would probably not get to the Supreme Court in time to influence the 2010 elections--then again, maybe the court won't wait for it and will decide the issue unilaterally. In any case, Congress has to step in rapidly to contain as much as possible the damage that will come from the Citizens United decision. Last week, I noted that the problem is not just the money that might be spent, but the implicit and explicit threats made to flood a district or state with a huge buy of independent ads, which will cause issues to be added to or quietly removed from the policy agenda, or outcomes changed by adding or deleting a word, comma or paragraph. Another problem is the other kind of corruption, the shakedown of corporations by politicians threatening legislative mayhem unless a company ponies up. If you think that is unlikely, you have forgotten Tom DeLay and the K Street Project--and don't think these kinds of threats will come only from one party's leaders.

What to do? It would help if President Barack Obama quickly nominated meaningful commissioners to replace feckless Don McGahn and his cronies at the Federal Election Commission, but that is probably too much to ask. So Congress needs to step in and do the FEC's work--by passing explicit rules to make sure that independent expenditures are indeed independent and not coordinated in any way with candidates and parties.

Second, Congress needs to adopt truly robust disclosure rules for corporations and unions making these unlimited independent expenditures, either directly or indirectly (say, through the conduit of the Chamber of Commerce). For now, disclosure is still OK--so give them disclosure up the wazoo. Every dollar spent on campaign-related activity should be disclosed to shareholders and the public, including money given to pass-through organizations. And every independent ad financed by a corporation or union that is electioneering in purpose should include a "stand by your ad" appearance by the CEO or president.

Third, Congress can and should constrain the universe of corporations and other organizations able to engage in this activity, by barring companies that have contracts with the federal government from engaging in such spending--just as states with their own limits on corporate involvement in campaigns could do related to state governments. Fourth, Congress should ban the involvement of U.S. subsidiaries of foreign entities from electioneering, which, despite the protestations to the contrary, was a loophole opened wide by Justice Kennedy in Citizens United.

These steps are necessary for triage. Congress should also begin to look at other moves to make the system work better, in a world where one big corporation could flood the zone and limit the voice of others on the major broadcast media. A review of the lowest unit rate rules, to guarantee access to commercial time in prime times to candidates at the lowest rates stations offer to their best customers, should also be a top priority.

And since the Citizens United ruling is a particular boon to broadcast stations, it is time to consider additional bold steps on the broadcast front to try to create a new and more robust world of political discourse. The best way would be to create a new trade-off--remove the public interest obligations on broadcasters, which are largely a sham now anyhow, and replace them with a reasonable rental fee--make it equal to one-fifth of the amount the National Association of Broadcasters claims is spent by its members every year on public interest obligations. Then take that money and put it into a public/private foundation to pursue activities in the public interest, including utilizing public broadcasting to create a real public square for political discourse.

Over the medium term, Congress needs to create a whole new regime of campaign finance, one focused more on incentives for small donors and less on regulatory regimes limiting behavior. Inevitably, that will mean some public money, not as grants but as matching incentive funds. I hope Sen. John McCain's (R-Ariz.) protestation that he will not support public financing does not extend to things like tax credits or rebates for small donations, or matching funds for the same purpose. At this moment of peril, the system needs his leadership for another generation of common-sense reforms that will not involve a meddlesome, activist, insensitive Supreme Court. That is the topic for another day.

Norman J. Ornstein is a resident scholar at AEI.

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